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6 benefits of hiring a tax agent for your taxes

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‍Most people dread doing their taxes, even if they’ve organised and sorted receipts on a regular basis. At their worst, taxes can be a complicated mess, especially when new tax laws come into effect. Like anything that you want to be done correctly and efficiently, there’s a lot of reasons you might want to hire a pro.

A common objection to hiring an accountant or tax agent is the cost involved.However, the benefits of hiring a tax agent far outweigh these costs, let’s break it down for you. In this blog we’ll discuss 6 benefits of hiring a tax agent.

1. You’ll know exactly how much tax you owe to the IRD

When you handle your own taxes, it can be difficult to know exactly how much you owe. You may have to go back and adjust your returns each year due to tax deductions or credits.

For example, do you know how much you can claim for your home office expenses, if you run your business from home? Are you aware of the latest rules for tax deduction? Which method should you use to depreciate your business assets and equipment? Are entertainment expenses eligible for tax deduction? How about charitable donations?

Doing your taxes can be time consuming and frustrating; and there’s always room for mistakes. An experienced tax agent will know exactly when, and how much, you need to file in order to avoid interest and penalties. This way, you'll be confident you owe the right amount. 

2. Tax agents are good at detecting fraud 

Tax agents have a keen eye for anything that looks fraudulent or doesn’t add up in your sales income. They have a vast knowledge of what looks normal and what doesn’t. Having a professional sort through your records each year can help make sure you’re being paid correctly by your clients.

If you file taxes through the DIY route, you could miss something that a tax agent would catch right away.

3. You’ll ensure your tax return gets filed on time

When you hire a tax agent, they’ll usually try to file your taxes as soon as possible. They generally want to get your taxes filed on time, as they also have deadlines with IRD.  

However, business owners who file their own taxes run the risk of procrastinating or forgetting deadlines,  as taxes are not always their first priority. If it all gets a bit too much, some put off their taxes for years (don’t worry, we’ve seen it all).

If this sounds familiar, you could potentially face fines that cost more than the amount of money you owe in tax.. You would also need to pay interest on the amount you owe.

Hiring a tax agent takes the stress out of filing taxes when deadlines are approaching. At Beany, not only do we have a direct integration with IRD (meaning you’ll never miss any deadlines), we’ll  also discuss and implement tax minimisation and management strategies with you. Talk to one of our problem solvers to find out more about how this works. It’s also free to sign up!

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4. Help with tax laws that have changed

Tax regulations change often, and occasionally new rules and regulations won’t match up with deductions and credits you’ve been using in the past. For example, fixed assets that cost less than $1,000 can be written off immediately.

Tax agents are there to make sure you take advantage of any changes in tax laws, and apply these new legislations to your situation. 

5. Expert advice on tax planning and tax management strategies 

One of the more common accounting myths for business owners is that your tax agent only plays a role when it comes to the end of the financial year. This couldn’t be further from the truth!

Good tax agents do more than keep your books right and file your taxes on time. An experienced tax agent will be able to give you the best advice on tax planning and tax management strategies. These include:

  • Prepare the current years tax return accurately
  • Plan for future tax liabilities
  • Maximise tax savings
  • Look at Tax Pooling options to minimise penalties for taxes

6. You’ll get a tax extension (in most cases)

One of the most important benefits for hiring a tax agent is the possibility of being granted an extension for filing your tax returns (as long as you’re linked with a tax agent or an accountant before 7 July).

The latest date for DIY filers to lodge their tax returns to IRD is 7 July. If you miss this deadline, you may face a late-lodgement penalty. However, if you use a tax agent or an accountant to lodge your taxes, this deadline is extended until 31 March the following year. This extension prevents the rush to get all your documents ready, and you’ll have more cash in your bank account for longer.

The bottom line 

Even when you hire a tax agent to prepare and tax your tax return, you’re required to sign off as a business owner. By signing off, you’re declaring that your tax agent has prepared the tax return correctly, based on the information you provided them. The responsibility still lies with you. 

If any mistakes have been made, this article from IRD can show you how to fix tax mistakes.

Who are Beany? 

We’re an online accounting firm that is always right here for you, your accounting pain relief. The most advanced technology lets us work way more closely with you than a normal accountant world. ​

We have a dedicated team of certified accountants and a support team to take care of your business no matter where you are, so you can focus on growing your business. We take out the ‘fluff’, break down the barriers and get things done. Looking out for you is what we are all about. Get started for free today.

Tori as a dog

Tori Ma

Performance marketer

Performance marketer at Beany, and into true crime documentaries.

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